The Pound Sterling (GBP) is still struggling to make and hold ground through the low 1.26 area against the US Dollar (USD) following the UK inflation data earlier, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

More GBP losses ahead

"Headline inflation fell less than expected (- 0.1%) in January, pushing the Y/Y pace of price growth up to 3.0% (versus 2.8% expected and 2.5% in December). Services prices also picked up—to 5.0% Y/Y—but came in below forecasts (5.1%), a minor positive in the data. The report underscores the cautious approach to policy adjustment that BoE Governor Bailey has stressed recently."

"GBP made a little more progress through retracement resistance at 1.2610 earlier but spot’s inability to hold gains (and new cycle highs in particular) leave it looking prone to more softness. Support is 1.2580 and a daily close at or below here will point to more GBP losses ahead."